Effect of price discount frames and levels on consumers' perceptions in low‐end service industries
International Journal of Contemporary Hospitality Management
ISSN: 0959-6119
Article publication date: 24 August 2010
Abstract
Purpose
The purpose of this study is to investigate the effects of price discount frames and price discount levels on consumer perceptions about the quality of the service product, the value of the discount, their purchase intentions and their willingness to spread the word of mouth about the discount savings across different types of services.
Design/methodology/approach
The study uses an experiment design method using three interesting variables: discount format, discount level and service industry type. The experiment included four different types of low‐end price service levels: restaurants, hotels, mailing services, and retail services.
Findings
The findings indicate that price discount frames and discount levels do affect consumers' perceptions on the value of the discount, the quality of the service, their intention to purchase and their willingness to engage in WOM advertising.
Practical implications
The practical implication for service firms that want to use price discount promotions to encourage sales and increase revenue is that they should carefully consider the price range and the value or quality of image they intend to signal when using these different price discount frames and the service they are selling to determine the discount level to use.
Originality/value
This paper is valuable to low‐end service marketers that seek to use price discount promotions to encourage sales and increase revenue.
Keywords
Citation
Nusair, K., Jin Yoon, H., Naipaul, S. and Parsa, H.G. (2010), "Effect of price discount frames and levels on consumers' perceptions in low‐end service industries", International Journal of Contemporary Hospitality Management, Vol. 22 No. 6, pp. 814-835. https://doi.org/10.1108/09596111011063106
Publisher
:Emerald Group Publishing Limited
Copyright © 2010, Emerald Group Publishing Limited